Law and Economics
Business Strategy and Operations
“Wealth and growth in today’s economy are
driven primarily by intangible (intellectual)
assets. Physical and financial assets are rapdily
becoming commodities, yielding at best an
average return on investment.”
Baruch Lev, Intangibles, 2001
In today’s knowledge-based economy, an increasing share of corporate assets involves intellectual property, such as patents, copyrights, and trademarks. In addition to these more traditional intangible assets, intellectual property has evolved over time to include other “assets” like business processes, the logic of software, and even the “look and feel” of Internet web pages. Given the growing importance of intangible assets like these, it is not surprising that commercial litigation increasingly entails disputes over intellectual property.
Intellectual property litigation includes aspects of both liability and damages. In patent disputes, for example, judges and juries are asked to determine liability issues such as whether or not a product or process is patentable, or whether the language of the patent is overly broad. These issues can be extremely complex, especially in high-tech industries like biotechnology. On the damages side, the issues can be similarly difficult, including valuing the profit potential of products still in early stages of development.
EI’s Intellectual Property Experience and Services
The complex nature of intellectual property disputes creates a pressing need for expert advice. EI economists are well situated to address a broad range of economic issues in such disputes, including valuing intangible assets, understanding the role of markets and competition on the value of intellectual property, and estimating damages arising from infringement. EI economists combine their extensive industry experience with strong microeconomic principles to provide well-reasoned analyses of intellectual property matters.
EI economists also can assist clients in a non-litigation setting. Like any other corporate asset, intangible assets should be evaluated and managed in such a way as to maximize their value to the owner. EI economists work with clients to understand and estimate this value and to develop strategies, such as licensing or outright sale, that can enable clients to realize this maximum value.
EI economists have been active in advancing the debate between antitrust concerns and intellectual property rights. While patents are intended to encourage innovation by protecting the rights of inventors, patents have the potential of unduly limiting competition. If patents are overly broad, or extend for too long a period of time, these anticompetitive concerns may outweigh the innovation-inducing benefits. This is a debate that may shape the future of both patent protection and competition analyses.
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